March 22 (Bloomberg) -- President Barack Obama’s nominee
for energy secretary is drawing criticism for leading a study
that minimized risks of natural gas while failing to disclose
that some of its researchers had financial ties to the industry.

The nominee, Ernest Moniz, is head of the Massachusetts
Institute of Technology’s Energy Institute, which issued a
report in 2011 that said the environmental risks of increased
drilling and production “are challenging but manageable.”

A report co-author had already agreed to take a position
with Talisman Energy Inc. when the report was released. Another
researcher was on the board of Cheniere Energy Inc., which is
building an export facility for liquefied natural gas.

“The public should have been informed that MIT’s natural
gas study was written by representatives of the oil and gas
industry,” said Kevin Connor, director of the Public
Accountability Initiative, a research group in Buffalo, New
York, that is critical of the use of hydraulic fracturing for
gas and compiled the details of the industry ties. “Aren’t
there academics there not on the payroll of gas companies?”

It’s unlikely this disclosure will harm Moniz’s chances of
confirmation. Obama has also supported development of natural
gas through fracking, and the Energy Department doesn’t regulate
the practice. That is left to the Environmental Protection
Agency and Interior Department.

White House

“The president has made clear that natural gas has a
central role to play in our nation’s energy future,” Clark
Stevens, a White House spokesman, said in an e-mail. “Dr.
Moniz’s work at MIT demonstrates his ability to work
collaboratively with a wide spectrum of stakeholders on a broad
range of energy issues.”

The Senate Energy and Natural Resources Committee scheduled
a hearing on Moniz’s nomination for April 9.

The accountability group’s report “Industry Partner or
Industry Puppet?” released this week also criticized Moniz for
not disclosing in the report that he was on the board of a
company that provided consulting to gas utilities.

The Buffalo group has previously targeted what it calls
biased academic studies.

It released an investigation last year on the University of
Texas Energy Institute and its report on fracking. The school
withdrew the study and imposed ethics guidelines on researchers
after it was shown that the primary author didn’t disclose that
he sat on the board of a gas driller.

Bridge Fuel

While groups such as the Environmental Defense Fund have
backed Moniz, some environmental groups have criticized his
nomination because he supports natural gas as a so-called bridge
fuel from carbon-intensive coal to cleaner energy such as solar.
Some local activists say tapping that gas by fracking, in which
water, sand and chemicals are shot underground, causes air and
water contamination.

Moniz has said there are risks, and industry disclosure and
government regulation can contain them. “Research and
regulation, both state and federal, are needed to minimize the
environmental consequences,” the MIT researchers said in their
report.

MIT’s Energy Institute discloses that it is sponsored by
companies such as BP Plc, Saudi Aramco and Duke Energy Corp., as
well as foundations. When it published its Future of Natural Gas
report in 2011, it disclosed the groups and companies that
funded that study, including the Clean Skies Foundation, which
backs natural gas and has close ties to Chesapeake Energy Corp.

‘Well Balanced’

MIT professors must file financial disclosure forms with
the university, and research is independent of funding, said
Victoria Ekstrom, a spokeswoman for the Energy Institute.

Ralph Cavanagh, co-director of the energy and
transportation program at the Natural Resources Defense Council,
an environmental group critical of fracking, was a member of the
advisory board for the study. He called it “well balanced” and
a fair report. While Cavanagh has differences with some
conclusions, the process “was very much in the spirit of peer
review.”

“The highest goal of technical people like myself is:
What’s true?” Daniel Cohn, a MIT professor who was part of the
study, said in an interview. “And I feel that standard was met
here.”

Public Accountability highlighted two main criticisms with
the researchers. First, Anthony Meggs, a visiting professor at
MIT and the group’s co-chairman, had joined Talisman, the
Canadian gas company, by the time the study was released.
Nonetheless, at a news conference he presented the finding that
fracking’s risks are manageable, identified as a visiting
engineer at MIT.

Talisman, Cheniere

Meggs left Talisman in January, spokeswoman Phoebe Buckland
said in an e-mail. A draft of the report was compiled in 2010,
before Meggs, a former BP executive, joined Talisman, Ekstrom
said.

Second, John Deutch, an MIT chemistry professor and former
U.S. CIA director, was on Cheniere’s board when the report was
released. The report backed the export of LNG, which Cheniere is
trying to do.

Deutch, who remains a Cheniere director, didn’t return an
e-mail and telephone message asking for comment.

Connor also criticized Moniz for not disclosing that he sat
on the board of consulting firm ICF International Inc., which
provides research for gas companies, utilities and trade
associations. As with all nominees, Moniz has pledged to resign
from that board and divest his stock if confirmed.

ICF also contracts to the government and works in other
industries, said Steve Anderson, a company spokesman. Only 2
percent of its revenue comes from natural gas, and the company
provides clients “independent objective analysis,” he said.